Working Papers

Job Market Paper

Networks feature prominently in venture capital markets. This paper focuses on alumni networks and exploits a new partner with new alumni networks joining a venture capital company as a plausibly exogenous change to the VC’s alumni networks. New alumni ties lead to an 8.21% increase in investments in startups with alumni founders, while induce a 22.93% increase in failure rates and a 17.53% decline in acquisition rates. Supplementary tests suggest that although venture capitalists benefit from networks through better information, preference for alumni startups offsets the benefits and induces capital misallocation.


with Adrien d'Avernas, Andrea Eisfeldt, Richard Stanton, and Nancy Wallace

This paper documents banks' differential deposit rate-setting behavior associated with bank size. Large banks set uniform deposit rates that ignore local market competition, while small banks set higher rates and respond to local market conditions. The geographic distribution of branches of large and small banks induces regional differences in deposit rates. Less populated and rural areas have a higher share of small banks and thus enjoy higher deposit rates, while populated areas attract more large banks with lower deposit rates. Besides, the elders and minorities receive worse deposit rates. We develop a model to rationalize the differential rate-setting behavior and regional distribution of large and small banks.


with Sizhu Lu

Startup seeking debt financing from banks (venture debt) is observed to be unexpectedly active and experiencing steady growth in recent years. This paper studies the rise of venture debt through a signaling channel. We model and document the role of venture debt as a positive signal in startup financing under asymmetric information, which increases the probability of a firm getting future venture capital (VC) funding, and in turn reduces the risk of venture debt and encourages lending to startups. However, VCs' reliance on the signals induces over-investment in startups of lower quality.

Work in Progress